Costa-Hawkins Repeal Inches Closer

Nuala Sawyer

10 months ago

Photo: Markus Spierling/Flickr

Martha Simmons was born at San Francisco General Hospital, and raised in the Bayview. For nine-and-a-half years, she rented a single-family home in the neighborhood where she grew up, paying the not-cheap price of $3,300 a month for a two-bedroom house. But she could make ends meet, and a decade ago, was even in talks with the owner about a rent-to-buy situation.

However, when the housing market rebounded after the last recession, the proposed sale price raised $300,000, well beyond her budget. In an attempt to push her out (presumably so that she could sell the building vacant) the landlord increased Simmons’ rent to $4,775 — and then to $5,200 a year later.

The results have been life-altering for her and her family. Simmons doesn’t have a college degree, and the pressure to make rent has forced her to take on three jobs. Her health has suffered, and she can’t sleep at night.

“It’s insane, and it’s going to keep escalating,” she tells SF Weekly. “We’ve been excellent tenants for the past 13 years. We’ve paid on time, made repairs, and so on. $5,000 is ridiculous, it’s throwing money out the window. I can’t afford it. I spent all my 401(k) and all of my savings. That’s where we are right now.”

Simmons’ situation is unfortunately not unique, and her landlord’s tactic of raising the rent beyond what is payable is legal, thanks to a sneaky 1995 legislation called Costa-Hawkins, which defines rental laws for the entire state.

This November, California voters may have a chance to repeal it, changing the futures of hundreds of thousands of renters statewide. It’s looking good: As of Feb. 1, the California Secretary of State reports that 25 percent of the 365,880 signatures needed by the June 25 deadline had been collected.

Costa-Hawkins is a tricky piece of legislation, but it can be summed up pretty easily. Created in 1995, it has two parts. The first prohibits cities in California from applying rent control to condos, single-family homes, or anything built after 1995, unless a city had a prior date set, in which case that was then made the legal standard that couldn’t be overturned. San Francisco rent control applies to buildings that were certified for occupancy before June 13, 1979, so if you moved into a building constructed after that date, you’re out of luck.

Additionally, tenants who rent a single-family home suffer the risk of what Simmons’ landlord is doing to her — raising the rent beyond what is affordable, in an effort to push them out.

The second part of Costa-Hawkins bans local enforcement of “vacancy controls,” which would bar landlords from their current tactic of immediately increasing rents on apartments to market rate as soon as tenants move out. This has innumerable negative results, one of which gives landlords an incentive to be evil. Owners can refuse to repair things or evict tenants on technicalities. The most egregious example might be predatory landlord Anne Kihagi, who psychologically tortured her tenants by cutting off their electricity or entering their units without permission, all in an effort to get them to move out so she could jump the rents up to market rate.

Kihagi is an extreme case, and not all San Francisco landlords squeeze every penny possible from tenants. But Costa-Hawkins is outdated for California’s current housing crisis, and activists have had enough. Last year, Michael Weinstein, president of the AIDS Healthcare Foundation and notable force behind the anti-PrEP campaign of yore, teamed up with Christina Livingston, state director of Alliance of Californians for Community Empowerment Action, and Elena Popp, founder of Eviction Defense Network, to draft what has since been christened the “Affordable Housing Act” ballot measure.

The evidence provided in the ballot measure’s draft supporting the need for such a measure is almost laughably clear. Statewide home ownership rates have fallen to their lowest level since the 1940s. A Californian earning minimum wage would have to work 92 hours a week to afford the median rent on a one-bedroom apartment. And even though California only has 12 percent of the nation’s population, it’s home to 22 percent of the United States’ population of people experiencing homelessness.

Costa-Hawkins’ repeal could have massive ripples across San Francisco’s housing stock, where two-thirds of its residents are renters, and approximately 172,000 homes are currently rent-controlled. Dean Preston, executive director of renters’ rights group Tenants Together, offered SF Weekly a utopian view of what our housing market could look like if Costa-Hawkins had never been created.

“Can you imagine what San Francisco rents would be like if the rent-control rate from the 1980s had been the basis for all the subsequent rentals?” he asks. “In other words, when tenants left landlords could raise the rent, say, 10 percent in setting the price for the new tenants — and that’s it. Think of how much more affordable this city would be right now.”

We did more than think about it: We did the math. In 1980, the average rent for a two-bedroom apartment was $475 — based on data collected from San Francisco Chronicle advertisements that year. If an apartment was vacated every four years between 1980 and 2018, and increased 10 percent with each new tenant, the rent (notably, sans inflation) would only be $1,120 today — an amount that would be affordable for those earning $14 minimum wage, as it would fall around 30 percent of their monthly income.

But that’s looking backward at what could have been, not forward at what we have to do next. If Costa-Hawkins makes it on the ballot, it’s not going to be an easy win; residential real estate companies, many of which lobbied for its enactment in 1995, are committed to making sure it’s not overturned.

“The real-estate industry very successfully undermined the ability of cities like San Francisco to regulate rents on properties when there’s a change of tenancy, and this is what we get,” Preston says. “Every time you hear someone saying that the reason there are $5,000 rentals in San Francisco because we haven’t built enough housing, I think you need to start pushing back. The same industry that’s trying to push upon you that building more luxury or market-rate housing is a solution to everything is the same industry that went to Sacramento and made certain that you couldn’t apply rent control, and you couldn’t regulate the rents.”

If Costa-Hawkins is successfully repealed in November, the future of San Francisco’s rental market will fall on our own city’s legislators — or on local voters — to create new rules. It adds a whole new element to the upcoming mayoral race, as the person who holds that seat may have a hefty amount of play in the rights of city renters moving forward.

Nevertheless, repeal needs to happen. Costa-Hawkins is 23 years old and the entire state of California has changed.

Martha Simmons stands outside her home with a young family member, November, 2017. (Photo by Daniel Kim)

It’ll be too late for Simmons, who will have to make a decision soon about whether to try to ride out her home’s rising rents, or find a new place to live. But in between her three jobs, she’s working hard volunteering for tenants’ groups who want to repeal Costa-Hawkins.

“You don’t feel so bad when you’re the only one, but when you hear so many people going through these issues, it becomes disturbing,” Simmons says. “Twenty, 30 years ago, it was said that eventually, the only citizens residing in San Francisco would be the very poor and the very rich. S.F. is no longer family-friendly. Blue-collar workers can’t actually reside here. But we’re the ones that keep the city going.”